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Sky High Company has two departments, X and Y. The following estimates are for the coming year: 20,000 Direct manufacturing labor-hours Machine-hours Manufacturing overhead A single indirect-cost rate based on direct manufacturing labor-hours for the entire plant is 30,000 0.000 20,000 $300,000 $330,000 A. $27.50 per direct labor-hour dB. $12.60 per direct labor-hour C. $16.50 per direct labor-hour D. $25.00 per direct labor-hour

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Answer #1

Answer: Option: B

A single indirect cost rate based on direct manufacturing labor-hours for the entire plant is $12.60 per direct labor-hour.

Explanation:

Single indirect cost rate = Total manufacturing overhead / Total direct manufacturing labor-hours

= ($300,000 + $330,000)/(20,000 + 30,000)

= $630,000/50,000

= $12.60 per direct labor-hour.

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